In the context of global oil prices, “Brent crude oil” is frequently referred to in the news. What does this term imply?
- It is a major classification of crude oil.
- It is sourced from the North Sea.
- It does not contain sulphur.
Which of the statements given above is/are correct?
- 2 only
- 1 and 2 only
- 1 and 3 only
- 1, 2 and 3
Explanation
Statements 1 and 2 are correct
- Oil benchmarks describe where the commodity originates, which determines its use and allows investors to track the price of a specific oil type. Brent Crude is the benchmark used for the light oil market in Europe, Africa, and the Middle East, originating from oil fields in the North Sea between the Shetland Islands and Norway. West Texas Intermediate is the benchmark for the U.S. light oil market and is sourced from U.S. oil fields. Both Brent Crude and WTI are light and sweet, making them ideal for refining into gasoline
Statement 3 is incorrect
- Brent has a sulphur content of 0.40%, well under the 0.50% benchmark, but it’s not as sweet as WTI.
